The company’s stated objective is to grow its fleet through selective acquisitions of modern vessels that will yield a competitive return on equity and will be accretive to both earnings and cash flow based on anticipated market shipping rates. Globus was formed in 2006 and operates out of Athens, Greece.

Fleet

Globus owns and operates a fleet of five dry bulk carriers which are managed by Globus Shipmanagement Corp, the company’s internal commercial and technical management group. As of June 30, 2017, all Globus vessels were operating on short-term time charters. The company’s vessels consist of the following:

Vessel

Year Built

Yard

Type

Month/Year Delivered

DWT

Moon Globe

2005

Hudong-Zhonghua

Panamax

June 2011

74,432

Sun Globe

2007

Tsuneishi Cebu

Supramax

Sept 2011

58,790

River Globe

2007

Yangzhou Dayang

Supramax

Dec 2007

53,627

Sky Globe

2009

Taizhou Kouan

Supramax

May 2010

56,855

Star Globe

2010

Taizhou Kouan

Supramax

May 2010

56,867

Total

300,571

As shown above, the fleet includes four Supramax vessels and one Panamax vessel with an aggregate carrying capacity of 300,571 DWT.[1] As of June 30, 2017, the weighted average age of Globus’ fleet was 9.3 years.

Market Outlook

A recently published report from global shipping consultancy Drewry Projects, notes that dry bulk shipping rates may struggle in the short-term. In order to counter pollution caused by high coal consumption, the Chinese government is planning to cut steel production from November 2017 to March 2018 by as much as 50 percent (or approximately 40 million tons). Although the actual reduction may be lower, the decreased demand for iron ore is expected to weigh on dry bulk charter rates through the second quarter of next year.

Thereafter, Drewry analyst Rahul Sharan expects that steel production will expand once the production limits have been lifted. Ongoing construction and infrastructure projects should help maintain a healthy demand for steel, and by extension, high-quality imported iron ore. There is also potential upside for dry bulk shipping from growing grain consumption in African and Asian countries.

With respect to supply, dry bulk shipping capacity is expected to grow at a moderate pace. Although improving charter rates could boost new ship construction, International Maritime Organization regulations make it more likely that a large portion of new orders will replace existing capacity.

Recent Developments

On September 27, 2017, an investor holding warrants issued in connection with a private placement transaction from last February exercised its right to purchase 500,000 shares at a price of $1.60 per share (above the prevailing market price of $0.95 per share), yielding gross proceeds of $800,000.

On October 19, 2017, the company completed a private placement transaction that yielded gross proceeds of $2.5 million. United Capital Investments Corp. will receive 2.5 million shares of common stock, and warrants to purchase 12.5 million shares of common stock at a price of $1.60 per share. United is led by Victor Restis, who has experience in the shipping sector and operates a fleet of approximately 40 vessels.

First Half / Second Quarter Earnings

In the quarter ended June 30, 2017, Globus reported revenue of $3.6 million, a 72 percent increase from the same period one year ago. Furthermore, revenue from the first half of 2017 increased 63 percent year-over-year to $6.3 million. Globus’ CEO, Athanasios Feidakis, noted that the recovery of dry bulk rates in recent months allowed the company to receive higher charter rates than in 2016.

Operating expenses for the second quarter totaled $4.4 million, approximately flat from the second quarter of 2017, while interest expense fell slightly. Accordingly, the company reported a net loss of $1.4 million ($0.05 per share), as compared to a net loss of $2.9 million ($1.12 per share) in the second quarter of 2016. However, we note that the company reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for both the first half and second quarter of 2017, totaling $0.3 million and $0.7 million, respectively.

Net cash used in operating activities in the first half of 2017 fell more than 60 percent year-over-year, although the second quarter cash burn rate was only slightly lower than the same period one year ago. At June 30, 2017, the company reported a cash balance of $0.8 million. In the first half of 2017, the company reduced long-term debt by approximately $20 million to $44 million, yielding shareholders’ equity of $42 million. Accordingly, Globus’ debt-to-equity ratio is 1.05.

Stock Performance

As of November 8, 2017, shares of Globus closed at $1.16 after losing nearly 40 percent on the day, yielding a market capitalization of approximately $40 million. This came after shares hit a high of $2.26 the day before, closing the session at $1.88. The company’s stock price has been highly correlated with other dry bulk shippers (DRYS, DCIX, TOPS, SHIP), which can be quite volatile.

At the start of 2017, Globus traded as high as $11.87, but has fallen steadily since then due to ongoing shareholder dilution. We also note that the number of shares outstanding at June 30, 2017, was 27.6 million, as compared to 2.6 million shares at December 31, 2016.

Stock Influences

Changes in dry bulk shipping rates;

Exercise of warrants by private investors and affiliated entities;

Changes in the operational performance of the company; and

New acquisitions and divestitures.

Risk Factors

As noted above, there is significant potential for shareholder dilution;

Although the company recently raised new cash, reserves are relatively low;

The company’s stock price is highly volatile and subject to speculation; and

The company has previously failed to meet the minimum requirements for NASDAQ listing, and negative price movements could lead to further deficiencies.

Summary

Globus, along with other dry bulk shippers, popped briefly before returning those gains shortly after. These stocks have tended to move in tandem, and will likely continue doing so as traders exploit short-term opportunities in these thinly traded stocks.

The bigger picture is that dry bulk shipping rates could regain strength in the middle of next year, provided shipping capacity does not expand significantly. Recent revenue and profitability gains at Globus are encouraging, but a heavy debt load and low cash reserves are ongoing problems.

Welcome to Traders News Source

Our track record speaks for itself…

Traders News Source recent profiles and track record, 487% in verifiable potential gains for our members on 3 small cap alerts alone! These are just three examples from over two dozen winners this year.

So, if you’ve been on the fence, perhaps it’s time to start doing some research and verify our numbers for yourself. We are constantly raising the bar and separate ourselves from the rest of the small-cap newsletters as the best in business.

We know with a large following comes a large responsibility as we have everyone from institutional investors to the beginner following our profiled securities in our newsletter. This is something we take very seriously always seeking small cap growth companies that have both near and long-term potential for our members.

Big Opportunities Trading Small Cap Stocks

***Get our small cap profiles, special situation and watch alerts in real time. We are now offering our VIP – SMS/text alert service for free, simply text the word “Traders” to the phone number “25827” from your cell phone***

Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Ivan Neilson, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.

This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.

We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.

When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.

17B Disclosure

Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.

PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.

Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.

TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.

The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.

Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.

[1] DWT or deadweight tonnage refers to the mass that a vessel can safely carry. This figure includes cargo, fuel, crew, and other supplies.

About Us

Created for active traders, Traders News Source is dedicated to being your number one source of breaking market news. Not only do we bring you top stories in key sectors, we give you well-researched expert reviews of specific opportunities in hot sectors like biotech, energy, new technology and more.